Thinking about doing a start-up? Congratulations, I applaud your ambition and drive. Just remember, you have now committed yourself to a future full of uncertainty and adventure. Even though I will be stepping you through some cautionary advice, (like my older brother always does to me before any launch – someone has to play devil’s advocate, right?), the focus of this article is to stay encouraged and focused. Just don’t make these simple mistakes. I’ll step you through them on a simple level so it is easy for you to understand and take in.
As much as I believe you are the exception to the rule, studies show that the vast majority of new businesses fail. It is possible to get a successful business venture the first time around but the chances are against it. Understanding why entrepreneurship efforts fall short could keep you from experiencing the same fate. Here is the list from my experience:
Trying to contend against the leaders
Most business men start off wanting to be the most successful in the entire industry. The big mistake made is competing with large companies within the same niche. Large companies possess a large resource pool and a solid client base permitting them to easily get rid of competition by offering lower prices, using superior advertising techniques etc. A brand new business with fewer resources ought to find creative methods to succeed in an industry. In other words, quit being a hero and go smaller sized. The more compact your niche, the more targeted your customers are. There is a saying which says “if everyone is your consumer, than no one is your customer.”
Trying to do almost everything
An entrepreneur that tries to handle many aspects of a business can become ineffective and therefore lead to failure. This over-generalization prevents you from concentrating on the accessible resources on providing exceptional services to clients. The inferior services provided repel clients. An entrepreneur should concentrate on supplying the best services on a particular niche, and should go for a niche that has the opportunity to cultivate and is currently underserviced. A little research will bring out a few untapped opportunities. Even most important, outsource whenever you can. The power of delegation can go a long way. You would be surprised what can be done just be simply empowering other people.
Not having sufficient funds
This leads to a lot of failures. Undervaluing how much capital you will need to operate this company until it becomes profitable will most certainly spell doom for your business. This is because expenses previously overlooked occur at the most unexpected times. This will drain your business fund causing a failure. An excellent idea will not develop into huge profits without adequate funding.
Having an incompetent team
The team the founder goes into business with will determine whether or not the venture will succeed. Most entrepreneurs create an incompetent team or go into business with individuals for the wrong reasons. Running a company is very challenging and possessing a team that cracks under pressure will result in failure. You will need to select your team cautiously, not simply off their LinkedIn profile or resume. Everyone has to have a common vision and push to succeed.
Going into business for weak reasons
Many entrepreneurs go into business for flimsy reasons. For example, a young man can begin a software development company so that he can be the next billionaire without sufficient planning on how to achieve it. These weak reasons don’t stand the test of time causing a person to give up along the way.
Micromanaging the business
A business owner is supposed to simultaneously handle many aspects of the business. This enables you to lose sight of business goals. To avert this, you need to develop the ability of delegating duties to your team members. Micromanaging a business also creates animosity in the team as they believe their skills and input is not valued enough. Micromanagement has spelt doom for many businesses. Enable your employees and provide them possibilities to create within their positions. This assurance in your people will build an infectious and positive culture in the organization.
Re-read these words of advice over and over again. Once that is soaked it, I would recommend studying some other tales of caution in the start-up world. They were instrumental on the early success of my own start-up. Best of luck to everyone. If you feel I have missed some ideas, I would love to hear your thoughts in the comment section.
Tanner Mangum is a start-up rookie, snowboarder, proud father of 2 and marketing director at Kangarew, home of the coolest iphone wallet case on the planet.
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